Factories still growing at record speed

 
Julian Harris
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BRITAIN’S manufacturing boom continued into February, maintaining the record high level of growth seen at the start of the year, according to a business survey released yesterday.

The sector recorded 61.52 in last month’s purchasing managers’ index, virtually unchanged from January’s level of 61.49 – the highest since records began in 1992.

All scores above 50 indicate economic growth.

Expansion in the factory industry has accelerated for five straight months, up eight points in the index from September’s reading of 53.5.

However, the survey exposed more danger for inflation in the UK, with output prices jumping at the second fastest speed in the records’ history.

Factory gate prices shot up to 63.6 in the index, up 6.5 points in the last four months.

“Inflationary pressures remain elevated, which may raise a further eyebrow amongst the members of the Bank of England’s Monetary Policy Committee,” said Rob Dobson of Markit, which conducts the survey along with the Chartered Institute of Purchasing and Supply.

Employment in the UK manufacturing sector also hit a record rate of growth in February, climbing to 61.7, from 59 in January, and 57.9 in December.

In September, job creation was virtually flat, at 50.24, yet has rebounded strongly since.

“A jobless recovery would be a weak recovery, so it is positive to see jobs growth hit a fresh record high,” Dobson said.

“However, the strong performance of the sector, which makes up just 13 per cent of GDP, can only partly offset the weaker parts of the economy such as services and construction,” he warned.

PMI data for the construction industry is released today, while progress in the UK’s largest sector - services - is published tomorrow.